Initial Farm Offering (IFO)

An initial farm offering (IFO) is a way of launching a new token through a decentralized exchange, popularized by PancakeSwap on BNB Chain from 2020. Instead of paying cash or a major coin directly, participants commit assets linked to the exchange, at first liquidity provider tokens earned from supplying a trading pool and later the exchange's own token, during a set sale window. When the sale closes, the committed funds are used to buy the new tokens at a fixed price, and if the sale is oversubscribed, participants receive a proportional share and get the unused part of their commitment back, sometimes minus a fee. The name links the model to yield farming, since users had to provide liquidity to take part. IFOs carry the usual risks of new tokens, including sharp price falls after launch. Also see initial decentralized offering.